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TMI Blog2017 (1) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... sequent years would not justify the action of the assessee not to file a bonafide claim. It is not the duty of a taxpayer to determine the tax liability for a particular year. The AO has been assigned the role of tax administrator in the Act.The assessee has to make only bonafide claim in the returns of income.To decide the taxability or otherwise of such items is the domain of the AO.In this background,we are of the opinion, that the order of the FAA does not suffer from any legal infirmity. - Decided against assessee - ITA No.6936/Mum/2013 - - - Dated:- 18-1-2017 - Shri Rajendra, A.M. and Shri Pawan Singh,J.M. For The Revenue : Shri Vishwas Mundhe-DR For The Assessee : Shri R.C. Jain Per Rajendra A.M. - Challenging the order dated 02/09/2013 of the CIT(A)-37,Mumbai the assessee has filed the present appeal.Assessee,an individual,is a civil contract.He filed his return of income on 31/ 03/2010,declaring loss at ₹ 7.82 lakhs. The Assessing Officer(AO)completed the assessment u/s.143(3) of the Act,on 11/08/2011 computing his income at ₹ 18.19 lakhs. 2. Effective ground of appeal deals with imposition of penalty u/s. 271(1)(c) of the Act, amounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k charges needed to be treated as capital expenditure, that it was only after the issue was raised the assessee accepted the mistake and offered ₹ 10.56 lakhs for taxation, that the admission was not voluntary on part of the assessee, that the assessee had failed to disclose truly and correctly all the particulars of the income while filing his return. The AO referred to the cases of Dharmendra Textile Processors (13SCC 369) and Reliance Petro Products (189 Taxman 322)and held that the assessee had concealed the particulars of income which had been uneathered during the assessment proceedings.He imposed a penalty of ₹ 2,51,609/-,invoking the provisions of section 271(1)(c) of the Act. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA).Before him,the assessee argued that the disallowances were not legally sustainable,that depreciation would be allowed over a period of time and there would be no loss of revenue,that the disallowance of interest and stamp duty,based on the concession given by the assessee could not be considered to be default u/s. 271(1)(c) of the Act, that penalty could not be levied for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. 4. During the course of hearing before us, the Authorised Representative (AR) argued that over a period of years depreciation had to be allowed to the assessee, that there was no loss to the revenue, that no penalty could be levied for registration, that it was for running of business.He referred to the case of son of the assessee Firdaus E. Khatri (ITA/6935/Mum/2013 AY-09-10, dt.12.1.2016). The Departmental Representative (DR) stated that the assessee agreed for the additions only after AO made enquiries in that regard, that the AO had asked pointed questions, that the admission was not voluntary, that the AO/FAA was justified in levying penalty. 5. We have heard the rival submissions and perused the material before us.We find that the assessee had made claim for depreciation on account of purchase of machinery,that the AO had directed it to produce various details with regard to the purchase,including the copies of the invoices/ purchase bills, sources of funds,bank charges etc.,that the scrutiny revealed that certain expenses were capital in nature.He called for further explanation from the assessee in that regard. It was only after the inquiry made by the AO,t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no person would ever claim the amount of Income-tax as a deduction with a view to avoid payment of tax. No hard and fast rule in this regard can be laid down and every case will have to be decided considering the facts and circumstances in which such a deduction is claimed, coupled with as to whether the explanation offered by the assessee for making the claim, is shown to be bona fide or not. The alleged admission by the assessee is after detection by the Department.It is not a case of mere making wrong claim.Both the claims were inadmissible prima-facie.The assessee had no justification to claim disputed items as revenue expenditure.It was also not the case of the assessee that it was under a bona fide belief that these two amounts could be claimed as revenue expenditure.Had it been so,he would have not admitted that same should be disallowed.It is also a fact that he did not agitate the disallowance in appellate proceedings.Facts of Reliance Petroproduct (P.)Ltd.were totally different.Besides,in penalty matters what is important is the explanation filed by anassessee in response to the notice of penalty.There is need to say that penalty and assessment proceedings are two ..... X X X X Extracts X X X X X X X X Extracts X X X X
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